Fighting the tide

Headlines
of record‑breaking water-related disasters around the world – whether flood or
drought – are a sign of things to come. As
Lord Stern recently warned, the extreme weather
events witnessed in many parts of the world reflect “a pattern of global change
that it would be very unwise to ignore”. Recently, the UK and French floods have
been in the news, but flooding is just one type of natural disaster and in fact,
if you look at 2012 data from Munich Re, floods account for less than 13% of
economic losses from natural hazards compared to 59% for storms and 16% for
forest fires and droughts – hence the need to think broadly about water
security.

Water-related
impacts are one of the main ways that we are seeing and feeling the effects of
climate change. We can expect more torrential rains, floods and droughts in
many areas. Events that were once considered “exceptional circumstances” are
now becoming commonplace.

The
cost of impacts of these events can be substantial and are set to rise in the
future. According to data gathered in a recent OECD survey
on water and climate change adaptation, flood
risk is projected to increase significantly across the UK. Annual damage to UK
properties due to flooding from rivers and the sea currently totals around GBP
1.3 billion. For England and Wales alone, the figure is projected to rise to
between GBP 2.1 billion and GBP 12 billion by the 2080s, based on future
population growth and if no adaptive action is taken.

A
recent OECD review of actions governments are taking to prepare for
water-related impacts of climate change found that nearly all OECD countries
ranked extreme events (floods and droughts) among their primary concerns. This
comprehensive review of policies for water and climate change adaptation is one
way that the OECD has been tracking progress on preparing for a more risky and
more uncertain future.

At
the OECD, we recommend governments undertake a robust assessment of risks – and
that’s somewhere we’re seeing progress. In fact, it’s one of the most active
areas of climate change adaptation in OECD countries. This is positive – but
this evidence base then needs to spur action. Governments need to determine
what is an “acceptable level” of risk by balancing the benefits and costs of
taking pre-emptive action. On the one hand, nobody wants to have their property
flooded, but on the other, completely eliminating flood risk is often not
possible and a high-level of protection is very costly. Once an acceptable
level of risk has been set, governments need to explore the options open to
them, and that includes sharing responsibility between the public and private
sectors when investing in infrastructure, devising insurance schemes, as well
as in emergency response.

As
we expect to see more severe weather events around the world, we need to
understand that anticipation can avoid future costs. For example, the European
Commission’s Joint Research Centre estimates that EUR 1 invested in flood
protection can result in EUR 6 of avoided damage costs. Investments in early
warning systems and emergency preparedness have significantly reduced casualties
in Hurricane-prone countries. Austria and Germany made smart investments in
flood defences after floods in 2002, and that served them well when water
levels rose again last year.

However,
sometimes avoiding risks altogether is cheaper than building infrastructure to
protect against them. Protection measures are not only about building hard
infrastructure but we can use innovative architecture and landscape solutions –
such as “green roofs”, “blue belts” or restored wetlands – so that nature is
part of the solution.

That
said, since we can’t predict the exact timing or magnitude of weather events,
it’s very hard to get the timing and investment level right when taking preventative
action. At a time when many governments are working under tight budget constraints,
it’s even more vital that investments are well-thought out. The most
cost-effective approaches to climate change adaptation are the most flexible
and forward-looking ones, and the OECD has recommended a range of policy tools
and investment approaches. This includes infrastructure design and financing
techniques that can be scaled up or down over time, as needed.